The alleged masterminds behind the manipulation of the three penny stocks that crashed on Oct 4, 2013, and their associates, tried to defend their stock prices when they came under selling pressure, right to the very end.
This was based on testimonies given by witnesses at the trial of John Soh Chee Wen and Quah Su-Ling, who are accused of masterminding a massive share manipulation operation centred on three counters: Blumont Group, Asiasons Capital and LionGold Corp, also collectively known as BAL. LionGold is now known as Shen Yao Holdings while Asiasons has since been delisted. Soh and Quah had allegedly used a web of dozens of trading accounts belonging to associates and their families and friends to pump up the prices of BAL shares to stratospheric levels.
See Khing Lim, remisier at Lim & Tan who was among the latest prosecution witnesses to take the stand, told the court how Quah herself had placed a big order of Blumont rights shares just minutes before the market closed on Oct 3, 2013. The following day, the prices of BAL shares would start their free fall, wiping out some $8 billion in market value along the way.
“I remember clearly on the last day before the crash, five to 10 minutes before the market closed, she called to buy Blumont rights shares worth about $2 million,” See told the court.
“And as far as you can recall, was this trade executed?” asked deputy public prosecutor David Koh.
“The trade was executed, yeah,” said See.
‘I can pay for it, what’s wrong?’
The court was told how See took charge of 20 to 30 active clients out of about a hundred clients at Lim & Tan which he joined in 2009, after quitting his job as a financial controller.
Not too long after he joined the brokerage, Dick Gwee Yeow Pin, a known close associate of Soh, introduced Quah as a client to See. See and Gwee were classmates at junior college. Over at Lim & Tan, See also handled the accounts belonging to Gwee’s wife Foo Seng Ngan as well as his brother Gwee Keng Toh.
According to See, Quah had her own account that she used for trading. As CEO of IPCO International at that time, she also controlled the trading account under an IPCO subsidiary, Friendship Bridge Holding Company.
See told the court Quah mainly traded BAL shares. Most of the time, she would do contra trades, although she sometimes picked up the shares had acquired.
Besides Quah, Neo Kim Hock, former chairman of Blumont, also had a trading account with Lim & Tan, which was handed over to See by another remisier. Quah and Neo told See that as Neo would be travelling often, Quah was authorised to give trading instructions on his behalf, and a mandate agreement was duly signed.
Besides Neo, See handled trading accounts under the names of Goh Hin Calm, former interim CEO of IPCO, and his wife too. He also handled accounts for two former directors of Annica Holdings, Edwin Sugiarto and Lim Meng Check, as well as one Lee Chai Huat, a Malaysian who sold an entity called Powerlite Ventures to Blumont. These individuals have been identified as associates of Soh and Quah.
Quah’s trading account started with a $250,000 limit, said See. However, this rose to between $2 million and $3 million by the time of the crash.
In the first year See handled trades for Quah, he had asked her why she was focused on buying and selling those same stocks repeatedly.
Quah’s reply, according to See, was, “Profit or loss, as long as I can pay for it, what’s wrong?”
‘Controlled in Singapore’
The court was shown a series of messages between See and Quah in the wake of the crash, where See tried to get her to make good for the trades due.
On Oct 9, 2013, See wrote to Quah, “Su-Ling, your $2 m cheque bounced.” This was for the payment of the $2 million worth of Blumont rights shares Quah bought on the eve of the crash. The payment, according to See, was eventually made.
In a message on Nov 10, 2013, See told Quah that 870,000 shares of LionGold were sold at 20.9 cents, resulting in “no more open positions”.
In another message dated Oct 17, 2013, See wrote, “Su-Ling, please ... I really need a cheque for Mr Lee & payment schedule ... thanks ... khing lim.”
See explained to the court that he was chasing Quah for money due from trades made using Lee Chai Huat’s account. In the wake of the crash, Lee’s account had chalked up outstanding contra losses of more than half a million dollars.
“I was calling him every day until he was so fed-up, he told me he could not do anything as the trades were controlled in Singapore and to look for Quah Su-Ling,” said See.
While See did not receive trading instructions for Lee’s account from Quah, he did what Lee told him and followed up with Quah to make good the losses for Lee’s account.
Although See received the first payment cheque from Quah, subsequent payments stopped. Therefore, See had no choice but to repay some of the trading losses himself.
“How are these losses to Lim & Tan being paid for?” asked DPP Koh.
“Using my own monies. I sold my share, refinanced my house,” said See.
“You are still paying those losses using your own monies?” asked Koh.
“Yeah,” said See.
‘Look for that lady’
In his cross-examination, Soh’s lawyer N Sreenivasan of K&L Gates asked See to confirm that for trades made using Lee’s account, he received trading instructions from Lee himself, and that See did not provide Quah with any daily summary of Lee’s trades.
“And he never said that this is Quah Su-Ling’s account, right?” asked Sreenivasan.
“No, he did not,” said See. “He never said that Quah Su-Ling controlled the account.”
Sreenivasan also got See to agree that Lee never mentioned Soh was controlling Lee’s trading account; Lee never told See to go look for money from Soh; and that Soh never gave See any trading instructions related to Lee’s account.
In contrast, Quah did give See trading instructions for the account belonging to subsidiary Friendship Bridge although See felt this was not out of place as she was the CEO of IPCO.
In his cross-examination, Sui Yi Siong of Eversheds Harry Elias LLP, who is defending Quah, asked See to confirm that his client never tried to give trading instructions for accounts that she was not authorised for.
“No. I will never accept the trading instructions,” said See.
“And if she had tried, you obviously would have asked her to sign a mandate form?” asked Sui.
“She has not tried before, I don’t think so,” said See.
In addition, Sui asked See to confirm if Lee used those exact words “controlled in Singapore” when chasing Lee for payment.
“I can remember that he was very fed-up. I called him every day, pressing him to pay the contra losses. And one day he just blurted out, ‘Okay, I can’t do anything, all this is controlled in Singapore’, then (he) said, ‘You go and look for them”,” said Lee.
“Then I pressed on, ‘Look for who?’ Then he said, ‘Look for that lady’. I said, ‘Which lady, is it Quah Su-Ling?’ ‘Yeah.’ He said yes,” said See.
Sui again asked See if the words “all these are controlled in Singapore” were indeed the exact words used by Lee. To which See said, “it’s very difficult”.
At this juncture, Justice Hoo Sheau Peng who was presiding over the trial, jumped in and asked See, “I think Mr Sui’s focus is on the words ‘controlled in Singapore’ — are you sure he used those words?”
“Sorry, I ... maybe,” said See.
“Yes or no,” said Hoo.
“Yeah, yeah,” said See.
Sui next asked See if his conversation with Lee was in Mandarin or English, given how both See and Lee were more comfortable in Mandarin. See said he was sure the conversation was in English.
“Now, even if what you remember is completely accurate, you don’t really understand what he means by that, correct? The words ‘being controlled in Singapore’. You don’t really understand what Lee Chai Huat meant by that?” asked Sui.
“You could say that,” replied See.
“The best person to explain what these words meant would be Lee Chai Huat, correct?” asked Sui.
“Yeah, I think so,” said See.
In the re-examination by DPP Koh, See was asked to explain why he could remember details of the conversation clearly although it had happened more than seven years ago.
“Because I believe we had a heated conversation that day. Yeah, so that registered in my mind.”
“Why was the conversation heated?” asked Koh.
“Because I was chasing him for the contra losses,” said See.
